This snippet from Goldman Sachs comes via eFX.
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“Risks related to the Russia/Ukraine conflict appear to have escalated, contributing to recent weakness in EUR/USD and other FX in the region. These geopolitical risks could rise substantially on May 9, when Russia celebrates its Victory Day-the anniversary of the Soviet triumph over Nazi Germany. But how much risk premium is in EUR/USD,”
“Even though Fed news this week were slightly positive for EUR/USD, it seems unlikely that the currency will rebound until geopolitical tail risks are resolved. Based on an average of approaches, we find that if½of the geopolitical “risk premia” were to reverse, EUR/USD would trade to 1.13, holding all else equal,”
In his speech on May 9 Putin did not declare war on Ukraine, as some (albeit a decreasing number of analysts) had suspected:
Despite rumours he would make a major announcement his speech stuck largely to defending Russia’s invasion.
So, can we say that GS have targeted EUR/USD to 1.13 based on this lack of escalation? Its a big call if so.
EUR/USD weekly candles … or should I say weakly?: